Putting Energy-Hog Buildings on a Strict Diet

Cutting energy use inside buildings of all kinds has become a hot market for a growing number of technology companies. Giants such as General Electric (GE) to Silicon Valley startups are developing everything from more efficient lighting and air-conditioning systems to fancy windows that can change colors to reflect or absorb sunlight.

Siemens (SI) and IBM (IBM) made separate announcements on Oct. 1 that underscored the hefty investments being made in this field. Siemens has agreed to buy Austin, Texas-based Site Controls, which develops software that enables companies to monitor their energy use throughout their buildings. The software can pull bits of energy-consumption data from various equipment inside a building. It can pool and analyze information from different office locations to present an overall view of a company's energy use and costs.

IBM said it's teaming up with Schneider Electric (SBGSY) to offer equipment and software for collecting and analyzing energy use and costs inside commercial and government buildings. Both companies have rolled out energy-management products separately before. They believe the partnership could help them market a more complete set of products and services to potential customers.

After all, buildings are energy hogs. The U.S. Department of Energy has estimated that 114 million households and more than 74 million square feet of commercial space account for 40% of the energy use and 39% of the carbon dioxide produced in this country. Energy-management tools promise to make it easier for businesses and homeowners to cut energy use, save money and reduce their carbon footprint.

Home Devices, Too

Given a national focus to conserve energy -- so that the U.S. can reduce its reliance on fossil fuels for generating electricity -- the federal government has been a generous booster of projects to develop new technologies and to demonstrate their use. In June, the government announced it was giving $76 million to companies for projects that aim to create all sorts of new electronics, insulation materials and sensors and software that can collect and analyze energy consumption data and automatically reduce energy use of certain equipment when it isn't in use.

Some companies, such as Honeywell (HON), also have gotten government funding to come up with similar energy-management gear for homes. Earlier this week, Intel (INTC) and Grid Net, a software developer, said the home-energy-monitoring devices they've been working on will be installed in Australia as part of a government-funded project there.

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Home-energy-monitoring gadgets tend to come as a small display that shows how much electricity is used throughout the day, how much that energy costs and whether the residents are likely use more or less electricity than they did in the previous billing period. With the right sensors, consumers can track how much electricity their TVs, refrigerators and other appliances use.

Although these devices seem cool and promise to provide perhaps more information than many people might care to know, they're largely still works in progress. The ones that are available now tend to be expensive, costing hundreds of dollars each.

Making this technology more affordable and convincing consumers that they need it are big challenges for companies in this market. With the emergence of electric cars and an ever-greater variety of electricity-guzzling gadgets, however, consumers might just find a need to keep a much closer tab of energy use and cost.